Steel Dynamics Comments on GM Lawsuit
03/26/2004 -
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Steel Dynamics Comments on GM Lawsuit
March 26, 2004 — Steel Dynamics, Inc. commented on the lawsuit which General Motors Corp. filed against SDI on Thursday, March 18, 2004 in an Oakland County (Pontiac) Michigan state court.
Steel Dynamics denies that there is any legally binding contract between the parties that obligates SDI to provide GM with the steel in dispute. "Our position with GM,” says Keith Busse, “has been clear from the outset — that there is simply no binding contractual obligation on SDI's part to supply GM with the steel it wants at the price it wants to pay, and we look forward to vindicating our position in court." Steel Dynamics is currently shipping steel to GM, and GM, under a reservation of rights, is paying the additional scrap surcharges, pending resolution of the commercial dispute. |
In that lawsuit, GM claims that SDI has breached a contractual obligation to GM to sell GM approximately 50,000 tons of steel during 2004 at certain pre-established prices.
Steel Dynamics denies that there is any legally binding contract between the parties that obligates SDI to provide GM with the steel in dispute. "The press and wire service reports have created a misimpression regarding SDI's position, largely as a result of factual inaccuracies in GM's court papers," said Keith Busse, Steel Dynamics' President and CEO. "Our position with GM has been clear from the outset — that there is simply no binding contractual obligation on SDI's part to supply GM with the steel it wants at the price it wants to pay, and we look forward to vindicating our position in court."
Steel Dynamics is currently shipping steel to GM, and GM, under a reservation of rights, is paying the additional scrap surcharges, pending resolution of the commercial dispute.
A company spokesperson stated that the dollar amount involved in this dispute is not material. The price differential for the steel in dispute between the prices GM claims to be applicable and SDI's pricing is estimated to be something short of $4 million pre-tax.
